China aims to reduce logistics costs

China aims to reduce logistics costs

Beijing, Aug 27 (IANS) China aims to reduce the cost of its logistics sector to alleviate the burden on companies and improve their business environment, the Ministry of Transport said on Saturday.

The country plans to reduce the proportion of logistics costs to the total value of goods carried by the sector by 0.5 percentage point from the current 4.9 per cent in the next three years, according to the ministry.

To achieve that, a slew of measures will be taken, including cutting highway tolls and removing illegal fees charged by airports, ports and railways, Xinhua news agency reported.

It is part of the country’s efforts to bring down corporate costs as a whole, in line with the ongoing supply-side structural reform designed to facilitate industrial upgrade and boost the slowing economy.

The State Council released a work scheme on Monday on cutting corporate costs, planning lower tax burdens, cheap financing, reduced red tape as well as more affordable land use, energy consumption and logistics.

Logistics costs account for a significant proportion of corporate costs in China. The ratio of logistics costs to gross domestic product (GDP) had been over 16 per cent for years, the National Development and Reform Commission (NDRC), China’s top economic planner, said on Friday.

The ratio was 14.6 per cent in the first half of 2016, down from 15.4 per cent a year earlier.

By reducing the ratio of logistics costs to the GDP by 1 percentage point, China can help industrial businesses save more than 900 billion yuan ($135 billion).